Discriminant analysis is a market research technique that is used to identify which, of a set of variables, are the best predictors of a categorical outcome. It can be used to predict whether a customer will purchase a product, whether a prospect will respond to a marketing campaign, or which market segment is most likely to exhibit a certain behavior.
Discriminant analysis is similar to regression analysis, but while regression analysis predicts a continuous outcome, discriminant analysis predicts a categorical outcome. As such, it is often used in market research applications where the goal is to segment customers or prospects into groups based on their likelihood of taking a certain action. By understanding which variables are the best predictors of customer behavior, market researchers can more effectively target their marketing efforts and allocate resources more efficiently.
